Algae Growth Fuels New Markets

The Algae BIomass Organization's Board of Directors Chair Margaret McCormick discusses the range of products that can be derived from algae.

By Margaret McCormick | January 30, 2014

The pages of Biomass Magazine are filled with stories about a variety of valuable biomass feedstocks being used for energy. These feedstocks are attracting investors looking to take advantage of the economic, environmental and regulatory advantages that come with clean, renewable fuels. In the algae industry, however, we are seeing a very different investment pattern.

The pursuit of algae-derived fuels such as gasoline, diesel, aviation fuel and ethanol is extremely attractive to private investors and governments, but it is the potential of algae in many other markets far from fuels that is also attracting attention.

Those investments are laying the groundwork for a new phase of growth in the algae industry.

Algae cultivation has historically been a small-scale affair, usually for food and nutritional supplement markets. Today, new investments in technologies that are proving themselves at commercial scales are heralding a very different industry. The high margins available from specialty chemicals, human health products, feeds and fertilizers are bringing in some of the first large revenue streams for companies deploying a new generation of technology. Algae will become big business, and not just in energy markets.

In January, Dan Simon, CEO of Arizona-based algae company Heliae Development LLC, announced that he had booked $4.2 million in sales for 2014, a number that will increase. Instead of fuels, these sales were for the algae-based nutraceuticals, personal care and other products that Heliae is producing at its first commercial facility that recently opened in Gilbert, Ariz.

BioProcess Algae’s LLC cultivation operation in Iowa is using the carbon dioxide from an ethanol plant to produce algae-derived nutraceuticals, fish meal, fish oil replacement and, eventually, fuels. Iowa's legislature was impressed enough to pass legislation that supports algae agriculture but doesn’t discriminate between products; it only provides the algae cultivators a measure of equal footing with other farmers.

In Hawaii, legislators have not acted on similar regulations, but that hasn’t stopped Cellana Inc. from developing a range of algae-derived products for feed, human health and biofuels. In Georgia, Algix LLC is harvesting algae 24/7 to produce a variety of bioplastic products for automotive markets, as well as others.

Those are just a few examples. The list of companies that are keeping their eye on fuel markets while taking advantage of algae’s potential elsewhere is growing. And they are attracting significant investment.

With this growth, we can expect a louder voice on policy from algae companies that are working in feed, food or biomaterials. The renewable fuel standard and the U.S. Department of Defense programs that promote biofuels will remain a focus, but we can expect the Farm Bill and efforts at the U.S. Food and Drug Administration and the USDA to be part of the industry discussion as well.

A new type of agriculture is creating a range of products derived from algae. We will be hearing about biomass energy products quite a bit, but I think we can expect more news about how biomass is also impacting how we source our food, our feed, even how we fight cancer, malaria and capture carbon.